Compliance Procedures for Retail Electricity Suppliers

(1) Standard Compliance. Each Retail Electricity Supplier shall be deemed to be in compliance with 225 CMR 14.00 if the information provided in the Compliance Filing submitted pursuant to 225 CMR 14.09 is true and accurate and demonstrates compliance with 225 CMR 14.07. A Retail Electricity Supplier shall demonstrate to the satisfaction of the Department that RPS Class I Renewable Generation Attributes, Solar Carve-out Renewable Generation Attributes, or Solar Carve-out II Renewable Generation Attributes used for compliance have not otherwise been, nor will be, sold, retired, claimed, used or represented as part of electrical energy output or sales, or used to satisfy obligations in jurisdictions other than Massachusetts. (2) Banked Compliance. A Retail Electricity Supplier may use RPS Class I Renewable Generation Attributes, Solar Carve-out Renewable Generation Attributes, or Solar Carve-out II Renewable Generation Attributes produced in one Compliance Year for compliance in either or both of the two subsequent Compliance Years, subject to the limitations in 225 CMR 14.08(2) and provided that the Retail Electricity Supplier is in compliance with 225 CMR 14.00 for all previous Compliance Years. In addition, the Retail Electricity Supplier shall demonstrate to the satisfaction of the Department that such Attributes: (a) were in excess of the RPS Class I Renewable Generation Attributes, Solar Carve-out Renewable Generation Attributes, or Solar Carve-out II Renewable Generation Attributes needed for compliance in the Compliance Year in which they were generated, and that such excess Attributes have not previously been used for compliance with 225 CMR 14.00; (b) do not exceed 30% of the RPS Class I Renewable Generation Attributes or do not exceed 10% of the Solar Carve-out Renewable Generation Attributes or Solar Carve-out II Renewable Generation Attributes needed by the Retail Electricity Supplier for compliance with the RPS Class I Minimum Standard, the Solar Carve-out Minimum Standard, or the Solar Carve-out II Minimum Standard, respectively, in the year they were generated, subject to 225 CMR 14.09(2)(d); (c) were produced during the Compliance Year in which they are claimed as excess by the generation of electrical energy sold to End-use Customers in the ISO-NE Control Area, by the generation of electrical energy on End-use Customers' sides of retail meters in the ISO-NE Control Area, or by the generation of electrical energy from Off-grid Generation Units in Massachusetts; and (d) have not otherwise been, nor will be, sold, retired, claimed or represented as part of electrical energy output or sales, or used to satisfy obligations in jurisdictions other than Massachusetts. 225 CMR - 126.14 (3) Alternative Compliance. A Retail Electricity Supplier may discharge its obligations under 225 CMR 14.07, in whole or in part, for any Compliance Year by making an Alternative Compliance Payment (ACP) to the MassCEC. Such funds shall be held in an account separate from other accounts of the MassCEC. (a) RPS Class I Procedures. A Retail Electricity Supplier shall receive Alternative Compliance Credits from the Department, subject to the following: The quantity of Alternative Compliance Credits, specified in MWhs, that can be applied to its obligations under 225 CMR 14.07(1) shall be determined by calculating the ratio of the total of ACPs paid for the Compliance Year to the ACP Rate for that Compliance Year. The ACP Rate for the RPS Class I Minimum Standard shall be $50 per MWh for Compliance Year 2003. For each subsequent Compliance Year, the Department shall publish the ACP Rate by January 31st of the Compliance Year. The ACP Rate shall be equal to the previous year's ACP Rate adjusted up or down according to the previous year's Consumer Price Index, but shall be $60 per MWh in Compliance Year beginning in 2021, $50 per MWh in Compliance Year 2022, and $40 per MWh, beginning in Compliance Year 2023. The following table reflects the ACP Rates in effect from 2003 through 2020: Compliance Year ACP Rate per MWh $50.00 $51.41 $53.19 $55.13 $57.12 $58.58 $60.92 $60.93 $62.13 $64.02 $65.27 $66.16 $67.07 $66.99 $67.70 $68.95 $70.44 $71.57 The Retail Electricity Supplier shall include with its Annual Compliance Filing copies of any ACP receipt(s) for ACPs made to the MassCEC for the Compliance Year. (b) Solar Carve-out Renewable Generation Procedures. A Retail Electricity Supplier shall receive solar carve-out Alternative Compliance Credits from the Department, subject to the following: 1. The quantity of solar carve-out Alternative Compliance Credits, specified in MWhs, that can be applied to its obligations under 225 CMR 14.07(2) shall be determined by calculating the ratio of the total of solar carve-out ACPs paid for the Compliance Year to the solar carve-out ACP Rate for that Compliance Year. 225 CMR - 126.15 The ACP Rate for the Solar Carve-out Minimum Standard shall be set annually according to the following schedule: Compliance Year ACP Rate per MWh 2024 (if necessary) 2025 (if necessary) The Retail Electricity Supplier shall include with its Annual Compliance Filing copies of any ACP receipt(s) for Solar Carve-out ACPs made to the MassCEC for the Compliance Year. (c) Solar Carve-out II Renewable Generation Procedures. A Retail Electricity Supplier shall receive Solar Carve-out II Alternative Compliance Credits from the Department, subject to the following: The quantity of solar carve-out II Alternative Compliance Credits, specified in MWhs, that can be applied to its obligations under 225 CMR 14.07(3) shall be determined by calculating the ratio of the total of Solar Carve-out II ACPs paid for the Compliance Year to the Solar Carve-out II ACP Rate for that Compliance Year. The ACP Rate for the Solar Carve-out II Minimum Standard shall be set annually according to the following schedule: 225 CMR - 126.16 Compliance Year ACP Rate per MWh 2028 (if necessary) 2029 (if necessary) (d) Use of Funds. The Department shall oversee the use of ACP funds by the MassCEC, so as to: further the commercial development of RPS Class I Renewable Generation Units, Solar Carve-out Renewable Generation Units, and Solar Carve-out II Renewable Generation Units; or 2. promote projects or activities that reduce greenhouse gas emissions or ratepayer costs through electric load reduction, peak demand reduction, or strategic electrification. (4) Financial Security Requirements for Retail Electricity Suppliers. A Retail Electricity Supplier that is not a Distribution Company must provide annually by January 31st evidence of financial security that: (a) is in the form of a surety bond or other financial instrument showing evidence of liquid funds, such as a certificate of deposit, an irrevocable letter of credit, a line of credit, a loan or a guarantee; (b) is the greater of: 1. $100,000; 2. 20% of the Retail Electricity Supplier's estimated gross receipts for its first full year of operation; or 3. 20% of the Retail Electricity Supplier's actual gross receipts for the preceding year of operation, not including revenue from the provision of basic service, for any year after the first year of operation; (c) does not exceed $1,000,000; (d) names the Department as beneficiary, obligee, or guaranteed party, as applicable and specifies that a notice of default issued under 225 CMR 14.12(5) or 225 CMR 15.12(5) shall be sufficient grounds to withdraw or obtain funds from the surety; (e) has an expiration date not less than one year; and (f) shall be adjusted annually, if based upon actual or estimated gross receipts, under 225 CMR 14.08(4)(b)1. or 2. 225 CMR - 126.17